The regional banking sector has come under intense scrutiny from investors in the wake of the recent collapse of Silicon Valley Bank and Signature Bank.
However, there are opportunities emerging for savvy investors who are willing to take on some risk.
Western Alliance Bancorporation (NYSE:WAL) is presenting itself at a steep discount, with prominent investors like Bill Ackman calling the recent bank trade potentially one of the “great trades” of all time.
See Also: Regional Bank Analyst Slashes Price Targets Across The Board – ‘Interest Rates Pose Significant Risk’
There is plenty of upside potential on the equity side of the Western Alliance trade, but some investors are more interested in the bank’s dividend yields, and how much stock they’d need to own to yield $200 per month in dividends.
For an investor interested in knowing how much Western Alliance stock they’d need to own to yield $200 per month, they would have to multiply 200 by 12 (each month in the year).
With $2,400 being the result, the investor would then divide 2,400 by Western Alliance’s dividend yield, which is currently 5.26%.
It would look something like this: 2400/0.0526
With that being said, an investor would need to own $45,627.37, or 1,591 shares of Western Alliance to yield $200 per month in dividends.
The dividend yield can change on a rolling basis as the dividend payment and the stock price both fluctuate over time.
The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change. For example, if a stock pays an annual dividend of $2 and its current price is $50, its dividend yield would be 4%. However, if the stock price increases to $60, the dividend yield would decrease to 3.33% ($2/$60).
Conversely, if the stock price decreases to $40, the dividend yield would increase to 5% ($2/$40).
Further, the dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company decreases its dividend payment, the dividend yield will decrease.
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